Steffy: Energy questions for the debate

By Loren Steffy |
October 2, 2012

Stand-ins for Republican presidential candidate, former Massachusetts Gov. Mitt Romney, left, and President Barack Obama, shake hands on stage during a rehearsal for a debate at the University of Denver ,Tuesday, Oct. 2, 2012, in Denver. President Barack Obama and Republican presidential candidate and former Massachusetts Gov. Mitt Romney will hold their first debate Wednesday. (AP Photo/David Goldman)

Photo By David Goldman

Stand-ins for moderator Jim Lehrer, center, Republican presidential candidate, former Massachusetts Gov. Mitt Romney, left, and President Barack Obama, right, run through a rehearsal for a debate at the University of Denver Tuesday, Oct. 2, 2012, in Denver. President Barack Obama and Republican presidential candidate and former Massachusetts Gov. Mitt Romney will hold their first debate Wednesday. (AP Photo/David Goldman)

Photo By Charlie Neibergall

Jim Lehrer walks outside the Magness Arena at the Daniel L. Ritchie Center for Sports and Wellness, site of Wednesday's presidential debate, on the campus of the University of Denver, Monday, Oct. 1, 2012, in Denver. Lehrer is the debate moderator. (AP Photo/Charlie Neibergall)

Newsman Jim Lehrer didn't ask for my help with questions for Wednesday night's presidential debate but I'll give him a few suggestions anyway, along with my reasons for why they should be asked:

1 1. What will you do to encourage increased domestic drilling, from shale formations onshore to deepwater drilling in the Gulf of Mexico, Alaska and the East Coast offshore? At the same time, what will you do to encourage more uses for cleaner-burning natural gas?

In recent years, we've made significant progress in boosting domestic oil production. If we are going to fuel economic recovery, the more domestic energy supply we have, the better.

1 2. How will you do that without compromising safety and the environment? We don't need another Deepwater Horizon disaster. Nor do we need backward regulatory responses like that of New York state, which essentially has decided to start over on crafting new rules for hydraulic fracturing after already investing years in studying the issue.

1 3. The Keystone XL Pipeline. That isn't a question, but it's become a politically charged statement that's sure to invoke talking points from both candidates. The Canadian oil sands are crucial to meeting the country's short-term energy needs. Responses to this point, though, also speak to the candidates' broader understanding of the need for energy infrastructure.

While we're at it, let's cut the hyperbole on this one. It's a single pipeline. It will neither solve our energy issues nor cause an environmental calamity.

1 4. What programs will you adopt to promote conservation and the development of viable alternative energy?

Conservation, even more than increased drilling, can go a long way toward stretching existing fossil fuel supplies. We'll need it, because worldwide demand for oil continues to surge while global production remains relatively static.

As for renewables, the key word is "viable." The development costs need to be weighed against the benefit. While the government should continue to fund development efforts, it shouldn't be an open-ended commitment. For all the billions that have been invested in them, wind and solar combined address less than 2 percent of our country's energy needs, and they are more costly than conventional fuels. "Ethanol" isn't a serious answer, either.

1 5. How would you use an overhaul of the tax code to help fund your energy policy? While it's not likely either candidate will get into the particulars of tax reform, it is likely that some sort of overhaul of the tax code is coming after the election, regardless of who wins.

That reform ought to include raising the federal gasoline tax. While that will be hugely unpopular, it will encourage conservation and it will raise much-needed revenue for roads, bridges and other transportation infrastructure.

It's also time to revise the tax credits the oil industry receives for the cost of producing oil and natural gas. Known as depletion credits, they ought to be tied to oil prices and phased out as prices go higher. That creates support to maintain domestic drilling if oil prices fall, but removes the tax breaks when prices rise and oil companies book record profits. Some of the revenue saved from the depletion credits could be used to fund research on renewables.

These tweaks could be included in a broader tax reform effort to lower corporate tax rates while eliminating loopholes.

All of these points, of course, relate to energy, which isn't specifically on the agenda for Wednesday night's debate, but which may come up in one of the three portions of the program devoted to the economy.

If it does, we're likely to hear more blather about energy independence and green jobs.

President Barack Obama has outlined an "all the above" strategy that leans heavily on promoting alternative fuels, while Mitt Romney has called for boosting domestic drilling in hopes of achieving energy independence - if not for the U.S., then for North America.

Both plans are based on unrealistic expectations. Presidential debates, of course, aren't a forum for building consensus, but what we need is a plan that pulls from both of these platforms, relying on increased domestic production to buy us breathing room while we develop viable alternatives that diversify our energy mix.

Loren Steffy, loren.steffy@chron.com, is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Follow him online at blog.chron.com/lorensteffy, www.facebook.com/LorenSteffypage and twitter.com/lsteffy.